Chinese lending to Africa fell sharply in 2024, dropping to US$2.1 billion, less than half the previous year’s total and marking the first annual decline since the COVID-19 pandemic, according to data released on Wednesday by Boston University.
The reduction represents a significant departure from China’s peak lending of $28.8 billion in 2016 and reflects a strategic shift toward smaller, commercially viable projects rather than large-scale infrastructure such as railways and roads. Between 2012 and 2018, Chinese lending to Africa consistently exceeded $10 billion annually, according to Boston University’s Global Development Policy Center.
The 2024 loans supported just six projects across the continent, including initiatives in Kenya and Egypt. The data also indicate a growing preference for yuan-denominated financing, replacing the traditional reliance on the U.S. dollar and signaling a broader strategic recalibration of China’s engagement in Africa.
“As the era of billion-dollar projects winds down, China’s evolving financial instruments may define a new, more selective phase of engagement,” the Boston University report said, highlighting a move toward partnerships that emphasize commercial viability and financial sustainability.
Observers say the shift reflects Beijing’s reassessment of risks in African lending and a focus on aligning investments with China’s broader geopolitical and economic objectives. The new approach prioritizes projects that generate revenue streams capable of servicing debt, rather than large, state-backed infrastructure schemes that have in some cases led to debt distress.
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China remains a critical financier for the continent, but analysts note that the reduced volume of lending and the move to yuan could influence currency exposure and project financing strategies for African governments. The change also comes amid global scrutiny over Chinese lending practices and a growing emphasis on sustainable debt management in Africa.
The report suggests that future Chinese engagement may focus more on sectors such as energy, digital infrastructure, and commercial real estate, where returns are more predictable, rather than traditional megaprojects. It also underscores a potential shift in the balance of influence between Chinese and Western financiers on the continent.
Overall, the data signal a recalibration of China’s Africa strategy, emphasizing selectivity, risk management, and a shift toward yuan-denominated lending, marking a new phase in the long-standing financial relationship between China and the continent.
